Fed Reserve Reports Erosion of Economy, Business Confidence

The Federal Reserve, in its latest “beige book” analysis of the economy, said today that economic growth is deteriorating across the United States, along with business and consumer confidence.

“Economic activity appears to have grown slowly in most Federal Reserve districts since early August but seems to have declined somewhat in others,” the report said.

The analysis, by the Fed’s 12 district banks, said there were widespread indications of a “weakening in business and consumer confidence” and found that retail sales “were sluggish or down in most of the country.”

Manufacturing activity was “mixed to weaker,” and commercial and residential construction declined although home sales increased in some regions of the nation, the report said.

Loan activity at banks was “lackluster” nationwide, but agricultural prices were strong and higher energy prices, a result of the Persian Gulf crisis, “appeared to be stimulating oil drilling, although some shortages of skilled workers were reported,” the Fed said.

In the West, the San Francisco-based Federal Reserve regional office reported that growth continues but at a slower pace.